Yes, it is still possible to have a well-balanced portfolio even if you are very risk-averse. A risk-averse investor typically would have a higher allocation to fixed income assets such as bonds and cash, which provide stability and lower risk, and a lower allocation to equities such as stocks and real estate, which are considered riskier assets.
For a portfolio with a total value of $1 million, a risk-averse investor might allocate 60% to bonds, 20% to cash, 10% to real estate, and 10% to equities.
On the other hand, a young investor who is willing to take on more risk for potential reward may allocate a higher percentage of their portfolio to equities. This type of investor may choose to allocate a larger portion of their portfolio to growth-oriented assets such as individual stocks or exchange-traded funds (ETFs) that invest in emerging markets or technology. For example, a young investor with a portfolio of $1 million might allocate 40% to individual stocks, 30% to technology ETFs, 20% to real estate, and 10% to bonds.
Regardless of your risk tolerance, it's important to have a diversified portfolio and regularly review and rebalance your investments to ensure that your portfolio aligns with your financial goals and risk tolerance.
